Wednesday, June 29, 2016

ASE, SPIL continue talks, dismiss impact of Brexit

Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) yesterday said negotiations to fully acquire rival Siliconware Precision Industries Co (SPIL, 矽品精密) remain under way, shrugging off the effects of macroeconomic uncertainties in the wake of the British decision to leave the EU.
ASE and SPIL last week extended the Saturday deadline to sign a joint share-exchange agreement by five days to tomorrow. The agreement would pave the way for ASE to strike a friendly takeover deal.
ASE, the world’s biggest chip packager and tester, owns a 25 percent stake in SPIL and plans to buy the remaining 75 percent for about NT$128.7 billion (US$3.97 billion).
“ASE is in talks with SPIL to sort out some legal details. We intend to wrap up talks by June 30. We have not been affected by Brexit at all,” ASE chief operating officer Tien Wu (吳田玉) told reporters ahead of the company’s annual shareholders’ meeting yesterday.
“We want [the deal] to create synergies,” Wu added.
When it comes to mergers and acquisitions, ASE looks at how such deals will affect the company’s fundamentals for the next 10 to 20 years, while Britain’s vote to leave EU is not a deciding factor in the company’s search for merger targets, Wu said.
Wu expects Brexit to hit global financial markets and foreign exchange markets in the short term, saying it will not have a contagious effect on consumer confidence, but added that the consequences of Brexit remain to be seen in the long run.
ASE and SPIL on May 27 signed a joint share-exchange memorandum of understanding to push for the creation of an industrial holding company proposed by ASE. The holding company is to own and operate both firms.
Based on the memorandum, SPIL is to sell all of its shares to the holding company at NT$55 per share, while ASE shareholders would be allowed to exchange their ASE shares for 0.5 shares in the holding company.
Wu also provided updates on ASE’s business outlook, saying it feels “tight capacity constraints now.”
The capacity constraints are expected to carry into the third quarter and ASE plans to add more capacity to cope with growing client demand, Wu said.
“The second half will be better than the first half... Demand for mobile phones looks very strong,” Wu said.
The growth pattern in the second half will be very similar to that of last year, he added.
Wu said supply chain inventory has returned to a reasonable level and excessive inventory will not be an issue this year, adding that instead, customer demand will be on his radar.
ASE shareholders yesterday approved a cash dividend of NT$1.6 per common share, based on the company’s net profit last year of NT$20.3 billion, or earnings per share of NT$2.55.
The distribution represents an about 4.52 percent dividend yield, based on the stock’s closing price of NT$35.4 yesterday.

http://www.taipeitimes.com/News/biz/archives/2016/06/29/2003649686

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